Why do we get “The binary files differ” message when comparing text files?

The files that you are trying to compare are specified as binary in Visual SourceSafe (VSS). Visual SourceSafe doesn't always recognize Text file types properly. Even it is Unicode UTF-8.When Check-in files with 'auto' type, it would treats them as binary.

Resolution

You can change the file type to Text by right-clicking the file -> Properties -> General tab in Visual SourceSafe (VSS).